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Spacehab Drops Columbia Lawsuit Against NASA

Says Efforts Better Spent Elsewhere

After over three years of litigation, Spacehab Inc. filed for a formal dismissal with prejudice this week of all claims against NASA, relating to losses incurred by the company as a result of the 2003 loss of the Space Shuttle Columbia.

As Aero-News reported, Spacehab initiated a formal contract claim against NASA in January 2004, seeking $87.7 million in damages for the loss of its Research Double Module (RDM, shown at right) during the accident. In October 2004, NASA responded to this claim with the determination that its liability was $8.2 million, including interest, and paid Spacehab this amount.

Spacehab subsequently filed an appeal with the Armed Services Board of Contract Appeals and over the past two years, the two parties have proceeded with preparations for a court hearing planned for July 2008. The company also filed a tort claim in November 2004, seeking damages of $79.7 million for the loss of the RDM, to which the court granted a motion in June 2006 to stay the case until resolution of the company's contract claim appeal.

Both sides were expected to meet in court in July 2008... but Spacehab has since determined the potential benefits that may be achieved by dismissing the claim against NASA -- its largest customer -- outweigh any potential benefits that may be achieved by continuing the litigation of claims against the agency.

"I believe that the dismissal of claims against NASA is in the best interest of the Company and am very pleased with Spacehab's pragmatic business decision in resolving this complex matter," said Spacehab President and CEO Thomas B. Pickens, III. "Spacehab is proud to press on in support of NASA and commercial customers worldwide."

Pickens adds Spacehab intends to focus its limited resources on current market opportunities and new business initiatives. Dropping the lawsuit will also require the company to pay Lloyd's of London, the insurer of the RDM, $500,000.



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